omprehensive Problem 1, Period 2: he Accounting Cycle During the month of May 20-, The General's Favorite Fishing Hole engaged in the fol- lowing transactions. These transactions required an expansion of the chart of accounts as shown below LGL nturt QuickBooks. Assets Revenues 401 Registration Fees 404 Vending Commission Revenue 101 Cash 122 Accounts Receivable 142 Office Supplies 144 Food Supplies 145 Prepaid Insurance 146 Prepaid Subscriptions 161 Land 171 Buildings Expenses 511 Wages Expense 512 Advertising Expense 521 Rent Expense 523 Office Supplies Expense 524 Food Supplies Expense 525 Phone Expense 533 Urilities Expense 535 Insurance Expense prob- to serve as actice set without 171.1 Accum. Depr.-Buildings ource documents. As students shouid plan 181.1 Accum. Depr.-Fishing Boats out three to four hours 182 Surround Sound System plete this problem. 181 Fishing Boats 182.1 Accum. Depr-Surround Sound Sys. 536 Postage Expense 183 Big Screen TV 183.1 Accum. Depr.-Big Screen TV 537 Repair Expense 540 Depr. Exp.-Buildings 541 Depr. Exp.-Surround Sound Sys. Liabilities 202 Accounts Payable 219 Wages Payable 542 Depr. Exp.-Fishing Boats S43 Depr. Exp.-Big Screen TV 546 Satellite Programming Exp. 548 Subscriptions Expense Owner's Equity 311 Bob Night, Capital 312 Bob Night, Drawing 313 Income Summary In order to provide snacks for guests on a 24-hour basis, Night signed a contract machines with food and drinks and pay a 10% commission on all sales. Estimated payments are made at the beginning of each month. Night received a check for $200, the estimated commission on sales for May May 1 with Snack Attack. Snack Attack will install vending Night purchased a surround sound system and big screen TV with a digital satellite system for the guest lounge. The surround sound system cost $3,600 and has an estimated useful life of five years and no salvage value. The TV cost $8,000, has an estimated useful life of eight years, and has a salvage value of $800. Night paid cash for both items Paid for May's programming on the new digital satellite system, $125 2 2 Night's office manager returned $100 worth of office supplies to Gordon Office Supply. Night received a $100 reduction on the account. 3 Deposited registration fees, $$2,700. 3 (continue Accounting for a Service Business Paid rent for lodge and campgrounds for the month of May, $40,000. In preparation for the purchase of a nearby campground, Night invested an additional $600,000. May 3 3 4 Paid Gordon Office Supply on account, $400o. 4 Purchased the assets of a competing business and paid cash for the fol- lowing: land, $100,000; lodge, $530,000; and fishing boats, $9,000 The lodge has a remaining useful life of 50 years and a $50,000 salvage value. The boats have remaining lives of five years and no salvage value Paid May's insurance premium for the new camp, $1,000. (See above 5 transaction.) $22,950. $1,200. Fishing Unlimited, and Fish Master. The magazines are published S Purchased food supplies from Acme Super Market on account, S Purchased office supplies from Gordon Office Supplies on account, 7 Night paid $40 each for one-year subscriptions to Fishing Illustrated monthly. Deposited registration fees, $62,750 Paid wages to fishing guides, $30,000. (Don't forget wages payable.) A guest became ill and was unable to stay for the entire week. A refund 10 13 14 was issued in the amount of $1,000. Deposited registration fees, $63,000. Purchased food supplies from Acme Super Market on account, 17 19 $18,400. 21 Deposited registration fees, $63,400. 23 Paid $2,500 for advertising spots on National Sports Talk Radio. 25 Paid repair fee for damaged boat, $850. 27 Paid wages to fishing guides, $30,000. 28 Paid $1,800 for advertising spots on billboards. 29 Purchased food supplies from Acme Super Market on account, $14,325. 30 Paid utilities bill, $3,300. 30 Paid phone bill, $1,800. 30 Paid Acme Super Market on account, $47,350. 31 Bob Night withdrew cash for personal use, $7,500. Adjustment information at the end of May is provided below. (a) Total vending machine sales were $2,300 for the month of May. A 10% commission is earned on these sales. (b) Straight-line depreciation is used for the 10 boats purchased on April 2 for $60,000. The useful life for these assets is five years and there is no salvage value. A full month's depreciation was taken in April on these boats. Straight- line depreciation is also used for the two boats purchased in May. Make one adjusting entry for all depreciation on the boats. COMPREHENSIVE PROBLEM 1: The Accounting Cycle 227 c) Straight-line depreciation is used to depreciate the surround sound system (d) Straight-line depreciation is used to depreciate the big screen TV (e) Straight-line depreciation is used for the building purchased in May (f) On April 2, Night paid $9,000 for insurance during the six-month camping season. May's portion of this premium was used up during this month. (g) Night received his May issues of Fishing Ilustrated, Fishing Unlimited, and Fish Master (h) Office supplies remaining on hand, $150. (i) Food supplies remaining on hand, $5,925 6) Wages earned, but not yet paid, at the end of May, S6,000 REQUIRED 1. Enter the transactions in a general journal. Enter transactions from May 1-4 on page S, May S-28 on page 6, and the remaining entries on page 7 To save time and space, don't enter descriptions for the journal entries. 2. Post the entries to the general ledger. (If you are not using the working papers that accompany this text, you will need to enter the account titles, account num- bers, and balances from April 30 in the general ledger accounts.) 3. Prepare a trial balance on a work sheet 4. Complete the work sheet. S. Journalize the adjusting entries on page 8 of the general journal. 6. Post the adjusting entries to the general ledger. 7. Prepare the income statement. 8. Prepare the statement of owner's equity. 9. Prepare the balance shee. 10. Journalize the closing entries on page 9 of the general journal. 11. Post the closing entries to the general ledger 12. Prepare a post-closing trial balance. omprehensive Problem 1, Period 2: he Accounting Cycle During the month of May 20-, The General's Favorite Fishing Hole engaged in the fol- lowing transactions. These transactions required an expansion of the chart of accounts as shown below LGL nturt QuickBooks. Assets Revenues 401 Registration Fees 404 Vending Commission Revenue 101 Cash 122 Accounts Receivable 142 Office Supplies 144 Food Supplies 145 Prepaid Insurance 146 Prepaid Subscriptions 161 Land 171 Buildings Expenses 511 Wages Expense 512 Advertising Expense 521 Rent Expense 523 Office Supplies Expense 524 Food Supplies Expense 525 Phone Expense 533 Urilities Expense 535 Insurance Expense prob- to serve as actice set without 171.1 Accum. Depr.-Buildings ource documents. As students shouid plan 181.1 Accum. Depr.-Fishing Boats out three to four hours 182 Surround Sound System plete this problem. 181 Fishing Boats 182.1 Accum. Depr-Surround Sound Sys. 536 Postage Expense 183 Big Screen TV 183.1 Accum. Depr.-Big Screen TV 537 Repair Expense 540 Depr. Exp.-Buildings 541 Depr. Exp.-Surround Sound Sys. Liabilities 202 Accounts Payable 219 Wages Payable 542 Depr. Exp.-Fishing Boats S43 Depr. Exp.-Big Screen TV 546 Satellite Programming Exp. 548 Subscriptions Expense Owner's Equity 311 Bob Night, Capital 312 Bob Night, Drawing 313 Income Summary In order to provide snacks for guests on a 24-hour basis, Night signed a contract machines with food and drinks and pay a 10% commission on all sales. Estimated payments are made at the beginning of each month. Night received a check for $200, the estimated commission on sales for May May 1 with Snack Attack. Snack Attack will install vending Night purchased a surround sound system and big screen TV with a digital satellite system for the guest lounge. The surround sound system cost $3,600 and has an estimated useful life of five years and no salvage value. The TV cost $8,000, has an estimated useful life of eight years, and has a salvage value of $800. Night paid cash for both items Paid for May's programming on the new digital satellite system, $125 2 2 Night's office manager returned $100 worth of office supplies to Gordon Office Supply. Night received a $100 reduction on the account. 3 Deposited registration fees, $$2,700. 3 (continue Accounting for a Service Business Paid rent for lodge and campgrounds for the month of May, $40,000. In preparation for the purchase of a nearby campground, Night invested an additional $600,000. May 3 3 4 Paid Gordon Office Supply on account, $400o. 4 Purchased the assets of a competing business and paid cash for the fol- lowing: land, $100,000; lodge, $530,000; and fishing boats, $9,000 The lodge has a remaining useful life of 50 years and a $50,000 salvage value. The boats have remaining lives of five years and no salvage value Paid May's insurance premium for the new camp, $1,000. (See above 5 transaction.) $22,950. $1,200. Fishing Unlimited, and Fish Master. The magazines are published S Purchased food supplies from Acme Super Market on account, S Purchased office supplies from Gordon Office Supplies on account, 7 Night paid $40 each for one-year subscriptions to Fishing Illustrated monthly. Deposited registration fees, $62,750 Paid wages to fishing guides, $30,000. (Don't forget wages payable.) A guest became ill and was unable to stay for the entire week. A refund 10 13 14 was issued in the amount of $1,000. Deposited registration fees, $63,000. Purchased food supplies from Acme Super Market on account, 17 19 $18,400. 21 Deposited registration fees, $63,400. 23 Paid $2,500 for advertising spots on National Sports Talk Radio. 25 Paid repair fee for damaged boat, $850. 27 Paid wages to fishing guides, $30,000. 28 Paid $1,800 for advertising spots on billboards. 29 Purchased food supplies from Acme Super Market on account, $14,325. 30 Paid utilities bill, $3,300. 30 Paid phone bill, $1,800. 30 Paid Acme Super Market on account, $47,350. 31 Bob Night withdrew cash for personal use, $7,500. Adjustment information at the end of May is provided below. (a) Total vending machine sales were $2,300 for the month of May. A 10% commission is earned on these sales. (b) Straight-line depreciation is used for the 10 boats purchased on April 2 for $60,000. The useful life for these assets is five years and there is no salvage value. A full month's depreciation was taken in April on these boats. Straight- line depreciation is also used for the two boats purchased in May. Make one adjusting entry for all depreciation on the boats. COMPREHENSIVE PROBLEM 1: The Accounting Cycle 227 c) Straight-line depreciation is used to depreciate the surround sound system (d) Straight-line depreciation is used to depreciate the big screen TV (e) Straight-line depreciation is used for the building purchased in May (f) On April 2, Night paid $9,000 for insurance during the six-month camping season. May's portion of this premium was used up during this month. (g) Night received his May issues of Fishing Ilustrated, Fishing Unlimited, and Fish Master (h) Office supplies remaining on hand, $150. (i) Food supplies remaining on hand, $5,925 6) Wages earned, but not yet paid, at the end of May, S6,000 REQUIRED 1. Enter the transactions in a general journal. Enter transactions from May 1-4 on page S, May S-28 on page 6, and the remaining entries on page 7 To save time and space, don't enter descriptions for the journal entries. 2. Post the entries to the general ledger. (If you are not using the working papers that accompany this text, you will need to enter the account titles, account num- bers, and balances from April 30 in the general ledger accounts.) 3. Prepare a trial balance on a work sheet 4. Complete the work sheet. S. Journalize the adjusting entries on page 8 of the general journal. 6. Post the adjusting entries to the general ledger. 7. Prepare the income statement. 8. Prepare the statement of owner's equity. 9. Prepare the balance shee. 10. Journalize the closing entries on page 9 of the general journal. 11. Post the closing entries to the general ledger 12. Prepare a post-closing trial balance